Technical indicators show that the bitcoin market is in a critical situation. If buyers are unable to support the price, there is a possibility of a massive fall, such as Black Thursday 2020.
to the Report At the time of writing, Bitcoin is seeking to reclaim and maintain the $ 50,000 level. In addition, buyers are trying to keep the price candle, which has just crossed the Ichimoku cloud, above the indicator’s red cloud.
The last time the price candle failed to maintain its position above the red line of the Ichimoku cloud was on Black Thursday, March 2020, when the Bitcoin market faced one of the heaviest sales in its history. But is such a fall likely to happen again?
As long as Bitcoin hits a new price floor or a strong $ 50,000 uptrend can bring the digital currency to its most recent historical high and the candlestick distance from the red cloud widens, talk about continuing the uptrend or The beginning of the downtrend remains strong.
Buyers and sellers are now competing to break the resistance of the Ichimoku red line. At first glance, the $ 50,000 level seems to be a turning point for bitcoin, however, as the 3-day market view shows, bitcoin moves to maintain the high price position of the Ichimoku cloud.
If we want to predict the future price trend by examining the situation of the Ichimoku cloud in the past, breaking the resistance of the red advance line could lead to the formation of a fall like Black Thursday 2020. The red color of the cloud in Ichimoku’s system indicates the strength of sellers, so sellers may still have more power despite the rise in bitcoin prices in recent weeks.
If such a fall occurs, a new price floor will not necessarily mean the formation of a new downtrend. The correct definition of a downtrend is the recording of a series of consecutive price peaks and peaks, each of which is lower than its previous price. This only happens if the market trend is reversed at the current level.
Even Black Thursday 2020 was a kind of buying opportunity, signaling the end of the “ABC” correction wave. According to Elliott wave theory, a correction wave is formed after each progressive (ascending) wave.
In the ABC correction wave, wave C (second floor) is always lower than wave A (first floor). To add to the validity of this theory, it can be said that the uptrend before March 2020 and the recent uptrend of Bitcoin both have similar parts.
There is no guarantee that C wave will complete and record the price of the new floor. The uptrend is always moving in the direction of the general market trend and the current ABC correction wave of Bitcoin can be the fourth wave and part of a larger trend (wave 12345) and the formation of any downtrend in this situation should be considered.
The larger trend indicates that the final wave, the fifth wave, will be completed before the end of the uptrend, in which case it will be a memorable wave. If all else fails, get the hang of it and get the hang of it.